Manne to Testify at House Hearing on State of Video Competition

June 11, 2013

On Wednesday, TechFreedom Senior Fellow and Executive Director of the International Center for Law & Economics, Geoffrey Manne, will present testimony at the US House Energy and Commerce Committee’s Communications and Technology Subcommittee’s hearing on the reauthorization of the Satellite Television Extension and Localism Act (STELA) and the state of video competition, entitled “ The Satellite Television Law: Repeal, Reauthorize, or Revise? ” The hearing takes place in Rayburn 2123 at 10:30 am EDT tomorrow, Wednesday, June 12 and will be livestreamed here . The following statement can be attributed to Prof. Manne:

Today’s video marketplace is shaped by a byzantine set of rules from a bygone era. In 1992, cable had unique gatekeeper power over video programming. But today, cable is simply one of several competing conduits for video programming distribution. Today’s legacy regulations were intended to prevent cable from thwarting the rise of satellite DBS service. They have succeeded: Nearly all Americans have access to the two primary DBS providers in addition to a cable provider. One third also have access to a telco provider, and consumers are increasingly switching to online video distributors. Netflix alone already has more subscribers than Comcast. In other words, competition is thriving – and not just in the dimensions Congress conceived of a generation ago.

This should cause legislators to revisit the fundamental, if implicit, assumption on which most video regulation currently rests: that antitrust law is insufficient to protect consumers, and must be supplemented with industry-specific regulations.

Concerns over monopoly power and vertical integration are vastly exaggerated. In 1992 over half of all networks were affiliated with a distribution network; today the number is closer to 12%. Antitrust law can police the market for carrying content far more effectively than can special copyright limitations and telecom rules enforced by the FCC with little economic rigor.

Today’s legacy regulations do far more to hinder investment and innovation in content creation and distribution than they do to help. There are smarter ways to promote localism and access to content than by propping up the technologically outdated model of over-the-air broadcasting with needlessly complex regulations. The broadcasting system may well be reborn in new, more efficient distribution models over the Internet or using spectrum currently underutilized by broadcasters. But the future of video programming should be decided by what consumers demand, not the regulatory paradigm of the 1990s.

Read Manne’s full written remarks here and watch his oral testimony here at 10:30 am EDT on Wednesday, June 11. Follow the conversation on the #StateOfVideo hashtag.

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